Tag Archives: European Commission

The perils of being an opposition politician in Hungary

I don’t know whether I will be able to make a coherent story out of the mess the Orbán government most likely has purposefully created regarding the report of the European Commission’s European Anti-Fraud Office (OLAF) on irregularities—fraud and possible corruption—in connection with the construction of Budapest’s fourth metro line (M4). The report covered the period between 2006 and 2015.

Although the Hungarian government received the OLAF report—or its English-language summary, the Hungarian public heard about it only from the English-language news site Politico. It didn’t take long before the Fidesz government and the Fidesz-led City of Budapest, on the one hand, and the politicians of the socialist-liberal government of the pre-2010 period, on the other, were at each other’s throats. The government claimed that practically all the financial wrongdoings were committed before 2010 while the opposition politicians accused the Orbán government of making political hay out of the case while refusing to make the report public. The administration claimed that it has no authority to release OLAF’s findings.

Most likely because of the holiday season at the end of the year, for about a month not much happened. Then, on January 16, János Lázár officially announced that he will file a complaint against Gábor Demszky (SZDSZ), mayor of Budapest between 1990 and 2010, Csaba Horváth (MSZP), deputy mayor between 2006 and 2009, and János Atkári, a highly respected economist who for many years served as Gábor Demszky’s financial adviser. That announcement started an avalanche of often conflicting articles in the Hungarian media.

A day after Lázár’s announcement, his deputy Nándor Csepreghy gave a detailed press conference dealing with the Metro4 corruption case. The government found MTI’s report of that press conference so important that it was immediately translated into English. We learned from Csepreghy that the Fidesz government had had its own suspicions of fraud surrounding the project even before. The OLAF report only confirmed these suspicions.

Csepreghy disclosed a few relevant facts that might help our understanding of the case. For example, he revealed that the investigators of OLAF conducted interviews with 50 individuals, “including the competent executives and managers” of the Budapest Transit Authority (BKV) and the City of Budapest. In addition, Csepreghy named a few companies that had been involved in the construction of the metro line as possible culprits. He also gave the initials of certain individuals heading large public and private companies. Finally, he said that “there are dozens of actors mentioned in the report who were politicians, were associated with the realm of politics, or operated as semi-public actors.” Finally, he told the press that the “government’s legal advisers are currently looking into the possibility of disclosing the OLAF report to the public in its entirety, to which the Government is fully committed.”

Nándor Csepreghy at the press conference / Photo: Tamás Kovács (MTI)

Although the government filed a complaint against Demszky, Horváth, and Atkári, they weren’t among the individuals Csepreghy referred to by their initials. A Magyar Idők editorial found Demszky’s absence from the list especially regrettable. The former mayor will get off scot-free because “according to rumors, his name doesn’t appear to be in the report.” Only the CEOs of large companies will be prosecuted. But what will happen if they reveal “the name of the chief coordinator”? In brief, the journalist responsible for this editorial accuses Gábor Demszky of being the head of a conspiracy to commit fraud.

Meanwhile Hungarian members of the European Parliament decided to look into the question of whether the Hungarian government told the truth when it claimed that it needed the approval of OLAF to release the report and that it was waiting for OLAF’s response to its request. All three opposition MEPs–Csaba Molnár (DK), Benedek Jávor (Párbeszéd), and István Ujhelyi (MSZP)–asked the head of OLAF, Giovanni Kessler, about OLAF’s position. All three claimed that, according to the information they received, it was up to the Hungarian government whether to release the document or not. Since there is a controversy over the meaning of the information received, I will rely on Ujhelyi’s statement, which includes the original English-language letter he received from OLAF. Here is the crucial passage:

In response to your question, since the OLAF final report has now reached its intended recipients, the Office is not in a position to decide on the possible release of the report. Such a decision belongs in the first place to the national authorities to which the report was addressed. It is for these authorities to assess the impact of a possible release of the report and to ensure compliance with the relevant legal obligations on judicial secrecy, data protection and procedural rights, including the right of access to file.

It is hard to fathom why the Orbán government again resorted to lying instead of appealing to the possible legal problems that could stem from the release of the report. Since then, Attila Péterfalvi, president of the National Authority for Data Protection and Freedom of Information, personally asked István Tarlós, who by now has a copy of the document, not to make the OLAF report public. It looks as if Péterfalvi, before making this request, consulted with János Lázár of the Prime Minister’s Office and Péter Polt, the chief prosecutor, who are both against the release. Although there might be compelling legal reasons not to allow the publication of the OLAF report, given the reputation of Péter Polt’s prosecutor’s office one cannot help being skeptical about the real reasons for the secrecy.

Over the weekend Gábor Demszky gave an interview to Vasárnapi Hírek in which he detailed his position on the case. Demszky said that, according to the rules of the Council of Europe and the European Parliament, OLAF must give anyone mentioned in their investigative reports the opportunity to respond. Since no one contacted Demszky, Horváth or Atkári, it is probably safe to assume that they are not the subjects of the investigation. Even so, the Orbán government filed complaints against them. Demszky also said that because OLAF conducted its investigation between 2012 and 2016, “most of their information came from the offices of the Fidesz government.” OLAF, Demszky added, most likely accepted the information in good faith because its investigators don’t expect these offices to be swayed by political pressure.

I might add that one has to be very careful when assessing the veracity of witness testimony. We know from other politically motivated trials that witnesses often give false testimony. The most infamous was that of Zsolt Balogh, head of BKV. In order to save himself months of pre-trial custody, he invented the story that Miklós Hagyó (MSZP), one of the deputy mayors, demanded 40 million forints, to be delivered in a Nokia box.

The opposition parties are truly worried about the prospect of years of investigation by politically motivated Hungarian prosecutors. Even though in the past most defendants were eventually exonerated, they remained in limbo for years and their careers were ruined. We must also keep in mind that although OLAF has filed scores of such reports on cases involving fraudulent procurement practices, only four guilty verdicts have been handed down in the last almost seven years. Some cases, like that involving Orbán’s son-in-law, were unceremoniously dropped. The prosecutors’ sudden interest in this case indicates to me that they think they can use it to do damage to the opposition, one way or another. Evidence of culpability has never been the litmus test for deciding which cases to pursue.

January 30, 2017

OLAF finds irregularities–fraud and possible corruption–in the Metro-4 megaproject

So what else is new? Politico reported that the European anti-fraud office, OLAF, after looking into the financing of Budapest’s fourth metro line, found “serious irregularities—fraud and possible corruption.” OLAF recommended, because it has no authority to do anything else, that Hungary return €228 million to the European Commission and €55 million to the European Investment Bank. OLAF’s investigation covers the period between 2006 and 2015. As Politico noted, this period spans not just the two Orbán administrations “but also two Socialist-backed governments that ruled between 2004 and 2010.”

I have already written about the difficulties surrounding the building of this new metro line, so I will not recount the story here. Suffice it to say that when the line was eventually finished, it bore little resemblance to the original plans. It was only about 7 km long, running between the Kelenföld train station in South Buda and the Eastern Station on the Pest side. Originally, it was to run all the way to the outer sections of the city in Bosnyák tér, but because of financial difficulties the second part of the project was abandoned. As a result, the line is severely underutilized. And its cost was enormous. Benedek Jávor, Párbeszéd MEP, considers the project as it stands now “completely senseless.”

It is difficult to come by hard figures, but Politico puts the total cost of the project at €1.7 billion. According to the Hungarian version of Wikipedia, the cost was 450 billion forints, of which 180 billion came from the European Union and almost 170 billion from the central government. The City of Budapest contributed about 70 billion. The balance most likely came from the European Investment Bank.

As soon as the news of OLAF’s findings reached Budapest the debate began over who the guilty party is. The government’s first reaction was that it had absolutely nothing to do with the project. Everything was handled by the City of Budapest. (The City of Budapest, I would note, didn’t get a copy of the 104-page report OLAF sent to the government.) According to Lord Mayor István Tarlós’s office, as far as they know all the irregularities occurred between 2006 and 2010. So, the Gyurcsány and Bajnai governments and Gábor Demszky, former lord mayor of Budapest, are responsible for all the “irregularities” while the Orbán government is blameless. This is hard to believe.

Since the government has not released the OLAF report, we are in total darkness about the nature of these “irregularities.” I am, however, somewhat suspicious about their alleged timeline. For starters, it was only in September 2009 that the European Commission made the decision to finance the first 7-km section of Metro-4. Of course, that doesn’t preclude the possibility that fraud and corruption occurred before that date. Most likely it did. We know only too well how business is conducted in Hungary, especially when it comes to the prospect of “free money” from Brussels.

As you can see, no money was spared on the appointments

What strengthened my suspicion of the Orbán government’s culpability in this affair was an article that appeared in the government mouthpiece Magyar Idők only a few hours ago. The title of the article is telling: “Brussels wants to saddle Orbán with the affairs of Medgyessy and Demszky.” Brussels, it would seem from the headline, is pointing the finger at Orbán. Perhaps in anticipation of such a finding, the Orbán government set out to shift the blame to Medgyessy and Demszky.

Péter Medgyessy was prime minister of Hungary between 2002 and 2004. After his political career ended, he returned to his consulting business and in this capacity received 597,000 euros from the French company Alstom in 2006, the year when the final decision was made by the City of Budapest to buy Alstom cars for the new metro line. In December 2014 Alstom was found guilty of paying more than $740 million in bribes to government officials around the world.

A few months ago Hungarian authorities began an investigation into the connection between Medgyessy and Alstom. The final verdict on Medgyessy’s innocence or guilt has not yet been reached, but even if it turns out that he lobbied the Demszky administration on behalf of Alstom, for which he received money from the company, it is unlikely that OLAF considers this something for which either the Hungarian government or the City of Budapest is responsible. Unless, of course, they can prove that Medgyessy tried to bribe the officials responsible for the decision to buy Alstom cars. It seems, however, that the investigative committee set up by the Budapest City Council in September has been singularly unsuccessful in proving that any of the lobbyists tried to bribe those responsible for the decision. The final report of the committee has not been published yet, but probing questions by the right-wing media to Fidesz members of the committee have failed to unearth anything about money exchanging hands in connection with the purchase of the Alstom cars.

We can’t expect any information on the OLAF investigation from official sources for months. But, just as in the past, it can easily happen that the document will be leaked to the Hungarian media. After all, Politico is in possession of certain material already. Until then it’s a guessing game.

December 22, 2016

A new crusade in Brussels over the price of electricity

It was evident already in 2010 that the Orbán government considers the nationalization of utility companies one of its priorities. Indeed, by now almost all such companies, including, believe it or not, those of chimney sweeps, have been nationalized.

In 2013 the government, in an effort to bolster its sagging popularity, slashed retail utility rates. With this move the government killed two birds with one stone. The much-advertised cut in utility prices made the government very popular practically overnight. It also resulted in serious losses for E.ON, a German-owned gas and electricity company, and practically forced the German owners of E.ON to bail and sell the company to the Hungarian state. As it turned out, the Hungarian government paid far too much, 260 billion forints, when the assessors claimed that E.ON was actually 600 billion forints in the hole. Obviously, price was no object. Orbán wanted utility companies to be in state hands.

Once this was done, the government set about to lower prices in three stages. Critics warned that producing gas and electricity at a loss would mean that these utilities would not be able to undertake the technical innovations necessary for improved service. Once again, however, Viktor Orbán was lucky, at least in the case of natural gas. In the last couple of years the price of gas on the free market has fallen around 40%, yet the state did not lower the price it charged consumers anywhere close to that amount. Given the state’s monopoly in the energy sector and the government-regulated price structure, the profit margin of the state utility companies must be considerable. According to some estimates, Hungarian families pay about 25% more for gas today than they would if there were no fixed prices and if true market conditions existed.

Independently from all this, the European Commission is working on a so-called “winter energy package,” which is a comprehensive plan for the creation of an “energy union.” One particular provision of this proposal caught the eye of the Hungarian government: the abolition of government-set prices for electricity retailers over a five-year period. If adopted by the European Council, the body consisting of the prime ministers of the member states, Hungary will no longer be able to keep electricity prices artificially low. Hungary has among the lowest electricity rates in the EU. In Denmark consumers pay 0.309 euros per kWh, in Germany 0.297. In Hungary the price is 0.111 euros per kWh. Only in Bulgaria is electricity less expensive than it is in Hungary. The European Council is convinced that artificially low prices discourage the conservation of energy and deter investors.

electricity

So, the Orbán government decided to launch a new “war against Brussels.” Viktor Orbán announced in his Friday morning radio interview that “the government will not allow Brussels to eliminate the government’s power to set prices.” Such a move, he emphasized, would put an end to the government’s ambitious plan to lower utility prices even further in the future. He promised to defend “utility decreases,” adding that “it will be a difficult struggle but we have a chance of success” because Hungary’s position in Brussels has been greatly strengthened. Naturally, due to his outstanding political success on the world stage.

Szilárd Németh, who was chosen to be the “utility tsar” back in 2013, was given a new mission. The result? He announced that the government had found the remedy. The government will endow the Hungarian Energy and Public Utility Regulatory Authority (MEKH) with legislative powers which, in his opinion, could derail Brussels’ intentions of abolishing fixed electricity prices.

Németh outlined the terrible state of affairs during the socialist-liberal governments (2002-2010) when electricity prices went up by 97% and the price of gas tripled while inflation was only 58%. The evil foreign owners “lugged out 1,200 billion forints of profits.” But then came the Fidesz government which froze prices in 2010, and in the next two years prices rose only very little.

This is not what the author of a very thorough article remembers about the course of natural gas pricing. According to her, in 2012 one MJ of natural gas up to 1,200 m³ use was 15% more expensive than before the Orbán government came into power. Her final estimate is that if the Orbán government hadn’t touched gas prices at all, the average consumer would pay significantly less than he does today.

In discussing the evil deeds of Brussels, Németh stressed that the European Union cannot constantly ignore Hungarian sovereignty. “Hungary didn’t join the European Union to give up everything it possesses.” The decrease in utility prices is a question of sovereignty and national security. It is up to the Hungarian government to decide how it wants to help Hungarian families. Obviously, the government doesn’t want to help only those families who need assistance. Otherwise, it could offer subsidies to people whose income is insufficient to pay the full price for utilities. No, the government wants all Hungarians to be grateful that they are getting a break on their utility bills thanks to Fidesz.

The most interesting twist in Németh’s story came at the end of his press conference. He admitted that in 2013 the Hungarian parliament had extended the right of legislative powers to MEKH but that the European Union considered the decision illegal and subsequently the Hungarian government had to annul the law. So, I don’t know why the Orbán government thinks that this time around they will be more successful than they were three years ago.

All the talk about fighting Brussels on electricity prices is most likely just a political ploy. The Commission’s recommendations are just that, recommendations. The final nod comes from the European Council where Hungary is represented by Prime Minister Viktor Orbán. He can vote against the proposal.

My guess is that now that the migrant issue has lost its appeal, the government has decided to turn its attention to utility decreases which were so successful in gaining voter support before the last election. Fighting Brussels over a pocketbook issue can most likely be dragged out until 2018.

December 3, 2016

Brussels after the Hungarian referendum

Although the Hungarian media is full of the story that Antal Rogán lied about his extravagant helicopter ride to a wedding, I would rather talk about the Hungarian referendum’s reception in Brussels.

The initial reaction came from Margaritis Schinas, the first spokesman of the European Commission, who, in his October 3 press conference, tried to give the impression that the Commission takes an absolutely neutral position as far as the result of the referendum is concerned. As he put it: “If the referendum had been legally valid, we would have taken note of it; now that it is declared legally void, we also take note of it. We respect those who voted and those who didn’t vote.” A day later, in response to a question from a Hungarian journalist, the European Commission spokesman said: “The pertinent authorities declared the results of the referendum invalid. I leave it to you to draw the conclusion how this will influence the decision-making process of the European Union.”

We know that there was a sigh of relief in Brussels after the referendum failed. Martin Schulz, president of the European Parliament, indicated that Viktor Orbán’s failure to produce a valid referendum had weakened his position in any future negotiations with the officials of the European Union. As he put it, “Budapest should take it … seriously that it was not a majority and we have therefore a good chance for a dialogue.” This indicates that Viktor Orbán will most likely have a harder time in his negotiations in Brussels after the referendum fiasco.

On October 5 Jean-Claude Juncker made it clear in a speech to the European Parliament that he has no intention of lifting the quota of 1,294 refugees that Viktor Orbán himself approved already in February 2016. His remarks were interpreted by the anti-EU British Daily Express as a “brazen statement [that] is likely to cause consternation in Budapest.” Again today in Paris Juncker called on the member states to honor the decision on the distribution of refugees that was agreed upon in February. The Hungarian internet site Index seems to agree with the British paper when it predicts that Juncker’s hard-line attitude regarding compulsory quotas will only provide further ammunition for Viktor Orbán. However, Juncker’s steadfast, hard-hitting words of late don’t bode well for a friendly future encounter with the Hungarian prime minister, especially since Juncker looks upon referendums as the death knell of the European Union. Apparently, Juncker was specifically thinking of the Hungarian referendum when he talked about the problems of the European Union.

On October 6 Bertalan Havasi, head of the public relations department of the prime minister’s office, released the news that Viktor Orbán had sent a letter to Jean-Claude Juncker in which he gave details of the result, emphasizing that “3.33 million people expressed their will that without the approval of the Hungarian parliament no foreign nationals can be settled on the territory of the country” and therefore “he is initiating an amendment of the constitution.” He reassured Juncker that the proposed amendments will be in accord with European Union law as well as with Hungary’s international obligations. Copies of the letter went to Donald Tusk, Martin Schulz, and Robert Fico as the current president of the Visegrád 4 Group.

Jean Claude Juncker's door is always open Source: The Telegraph, credit AP

Jean-Claude Juncker’s door is always open / Source: The Telegraph, credit AP

At the October 3 press conference Margaritis Schinas, again in an answer to a question by a journalist, said that if Viktor Orbán would like to meet with the president of the European Union, “Mr. Juncker’s door is always open to all the heads of the member states.” Although Havasi made no mention of any such request, apparently Orbán did ask for an urgent meeting with Juncker in the same letter, as Népszabadság learned. But since Juncker already had a fixed schedule yesterday and today, “he could give Orbán only an impossible time that Orbán couldn’t accept.” As someone half-jokingly said, perhaps Juncker suggested meeting him late afternoon today, which certainly wouldn’t have suited the football-crazy Orbán who wanted to be present at the Hungarian-Swiss game held in Budapest. I suspect that the meeting between the two men will take place soon.

There is another issue in connection with the referendum. Tibor Navracsics, once one of the highest office holders in Fidesz and the Orbán government, is currently an EU commissioner. On the very day of the referendum he gave an interview to pestisracok.hu, a far-right Fidesz internet news site. In the interview he disclosed that he had voted “no” on the referendum question because in his opinion the question has nothing to do with the European Union or the European Commission. It is a national issue and therefore, despite his position as one of the commissioners, he can freely express his opinion. Index’s “Eurologus” agreed with the commissioner and quoted the European Commission’s “Code of conduct for commissioners.” Csaba Molnár, DK European Parliamentary member, thinks otherwise and asked Juncker to investigate the case. The leader of the Alliance of Socialists and Democrats of the European parliament, Gianni Pittella, agrees with Molnár that European commissioners have a duty to promote the general interest of the EU, not the interests of their own national governments.

The comments by Commissioner Navracsics on the failed referendum in Hungary calls this into question. A legal decision was taken on the resettlement of refugees, and the question in the referendum went directly against this and against the proposal coming from the EU Commission, of which Navracsics is a member. If Commissioner Navracsics does not believe in what his own Commission put forward and on the contrary thinks that national governments should not follow decisions taken by the whole of the EU, then we have a problem. If this is how he feels, then why is he working for the European Commission? Commissioner Navracsics must clarify his comments immediately.

Alexander Winterstein, deputy chief spokesman for the Commission, when asked about Navracsics’s action by euroactive.com, was evasive, claiming ignorance of the case. By today, however, it looks as if Juncker’s office is looking into the matter, asking for translations of Navracsics’s interviews and statements. Népszabadság learned that the officials of the commission find Navracsics’s public statements ambiguous, from which it is not clear whether they side with the Hungarian government or the commission on the issue of “the compulsory settlements.” Winterstein announced today that Juncker will bring the topic up at the meeting of th commissioners.

It is possible that in purely legal terms Navracsics is correct when he claims that no conflict of interest exists in this case. But one thing is sure: as euronews.com reported a day after the vote, Brussels considers Orbán’s failure to be their victory.

October 7, 2016

The leaders of Visegrád 4 meet with Angela Merkel

The European Union has gone through some rough times in the last year and a half. The Brexit decision certainly shook an EU already battered by the influx of almost two million refugees and immigrants. But at least the British departure, whenever it actually happens, will not undermine the foundations of the European Union. Some commentators, in fact, think that further integration, which they consider a necessity for the long-term survival of the EU, can be more easily achieved in the absence of a reluctant United Kingdom, which in the past consistently opposed any changes to the already very loose structure of the Union.

Closer cooperation would have been necessary even without the refugee crisis, but the presence of so many asylum seekers–mostly in Greece, Italy, and Germany–makes a common policy and joint effort by the member states a must. Thus, Chancellor Angela Merkel decided to launch a series of consultations with European leaders. To date she has talked with 17 prime ministers.

Her first trip was to Italy where she, Matteo Renzi, and François Hollande met first on the Italian Aircraft Carrier Giuseppe Garibaldi and later visited the grave of Altiero Spinelli on the Island of Ventotene. There, while a prisoner of Benito Mussolini’s regime, he composed the Ventotene Manifesto “For a Free and United Europe,” which envisaged a European federation of states. After this trip Merkel continued to meet with leading politicians. From newspaper reports it looks as if they more or less agreed that greater cooperation and a common security apparatus are necessary to handle the refugee crisis. Just this past weekend she met with the prime ministers of Austria, Croatia, Slovenia, and Bulgaria. According to Miro Cerar, the Slovenian prime minister, “there was no great difference of opinion between the German chancellor and her visitors.”

Only the so-called Visegrád 4 countries are unmovable in their opposition to common action and sharing the refugee burden. Merkel traveled to Warsaw to meet the four recalcitrant prime ministers. Although Hungarians are apt to think that it is their prime minister, Viktor Orbán, who creates the most trouble within the European Union, this might not be the case. Orbán is belligerent mostly at home. Once he gets to Brussels or, in this case, to Warsaw, he remains rather subdued. His Slovak and Czech colleagues, on the other hand, were widely quoted in the western media, not in the best light. Fico, for example, said that he would “never bring even a single Muslim into his country.” Bohuslav Sobotka of the Czech Republic, although more tempered, announced that he doesn’t want a “large Muslim community—given the problems we are seeing.” Fico, just before his meeting with Merkel, had paid a visit to Moscow, after which he renewed his call for the European Union to end sanctions against Russia. The Polish foreign minister accused Germany of selfishness and an unwillingness to compromise. Poland’s deputy foreign minister, Konrad Szymański, after the meeting hit back at Angela Merkel for criticizing those member states that are refusing to give refugee protection to Muslims.

Photo by Rafal Gruz MTI/PAP

Photo by Rafal Gruz MTI/PAP

Viktor Orbán’s views didn’t receive much coverage, but at least one of the four propositions he arrived with in Warsaw–the creation of a common European army–has enjoyed some limited support. Whether the creation of a European army is his idea or not is debatable. Orbán did talk about such an army in July in Tusnádfürdő/Băile Tușnad, but apparently already in May The Financial Times reported a German plan to set up such an army. And Zsolt Gréczy of Demokratikus Koalíció claims that the idea was actually stolen from Ferenc Gyurcsány, who suggested the creation of such an army a year ago.

The reception of the other three suggestions remains unknown. Let’s start with the most weighty one which would, if accepted, reinvent the European Union by practically annulling the European Commission. To quote it verbatim, first in the original Hungarian: “az Európai Tanács vezesse és csak ő vezesse az Európai Uniót. Az Európai Bizottság a politikai szerepjátszást fejezze be.” (The European Council should lead, and it should be the only one that leads the European Union. The European Commission should end its political pretensions.) I suspect that Viktor Orbán never presented this idea in such stark terms to Angela Merkel during their talks because, as an eagle-eyed friend of mine discovered, the English translation of the above passage on the official government website reads as follows: Viktor Orbán “went on to say that institutions such as the European Council and the European Commission should go back to fulfilling their ‘original roles’.” The first one for Hungarian consumption, the second for foreigners.

His next suggestion was economic in nature. Orbán suddenly discovered the benefits of austerity. This is quite a switch from his position six years ago, when as the new prime minister he visited Brussels in the hope of getting permission to continue running a 7% deficit instead of having to bring the deficit down below 3%. Now he is a firm believer in a tight budget, which made Hungary, in his opinion, an economic success. I’m not quite sure why Orbán felt the need to lobby for the continuation of this economic policy which, according to many economists, is responsible for Europe’s sluggish economic growth. I suspect that he might be responding to a perceived movement toward an economic policy that would loosen the current restrictions for the sake of more robust economic growth. Merkel has been talking a lot lately about higher living standards that would make the European Union more attractive to Europeans.

Finally, Orbán insists that the European Union should keep pouring money into the East European countries as part of the cohesion program, which in his estimation “has been a well-proven policy.” Sure thing. Hungary’s questionable economic success is due largely to the billions of euros Budapest receives from Brussels. Naturally, he wants to keep the present agrarian subsidies as well, a program severely criticized by many experts.

Whatever the prime ministers of the Visegrád 4 countries told Angela Merkel, it didn’t sway her from her original plans for solving the crisis. It doesn’t matter what Fico said, Merkel thinks “it is wrong that some say we generally don’t want Muslims in our country, regardless of whether there’s a humanitarian need or not.” She keeps insisting that “everyone must do their part” and that “a common solution must be found.”

Meanwhile Russian propaganda against Merkel is growing. Just today sputniknews.com portrayed her as the chief obstacle to an understanding between Moscow and the European Union. According to Russian political analysts, “Merkel is a supporter of the idea that it is Germany’s natural role to become the leader of Eastern Europe … and to drive the economic development of these countries,” naturally in line with German interests. According to these political scientists, Washington is actively working to turn Germany into a stronghold of anti-Russian influence, which “means that we will have to encounter a Germany that is strengthened not only in economic and political terms but perhaps militarily as well.”

In adopting an anti-German policy, the Visegrád 4 countries are implicitly allying themselves with Russia. I think they are playing with fire.

August 29, 2016

Another EU project: Renovation of fortified castles and luxury mansions

It was about a year ago that I first encountered two new programs launched by the Orbán government: the “National Castle Program” and the “National Mansion Program.”

The castles we are talking about here are actually late medieval fortified structures, built for the defense of the country. They were especially numerous along the border between Royal Hungary and the Turkish occupied center of the country. The structures in Szigetvár and Eger are perhaps the most famous. It was in Szigetvár that Suleiman the Magnificent died in 1566, as did the captain of the fort, Miklós Zrínyi/Nikola Zrinski, the Croat-Hungarian military leader who led his troops to their death instead of capitulating. Eger, the scene of a Turkish-Hungarian encounter in 1552, was memorialized in the popular novel by Géza Gárdonyi, Eclipse of the Crescent Moon. Both are tourist attractions, so it made sense to put them at the top of the reconstruction list.

The government will salvage 35 fortified castles and renovate 34 mansions. All told, 93 billion forints will be spent on these two projects, “mostly from money coming from the European Union.”

The justification for these two projects is that they will boost tourism. The government estimates that the renovated mansions will attract an extra 800,000 visitors, and an additional 600,000 visitors are expected at the fortified castles. Fifteen billion forints will have to be spent on hotels and services near the structures which, the government hopes, will come from private entrepreneurs. Viktor Orbán assigned János Lázár to supervise these projects. He, in turn, entrusted Undersecretary László L. Simon with the task, but Simon was fired a couple of weeks ago for incompetence.

Most of the fortresses are in terrible shape. Once Hungary reclaimed the Turkish-occupied part of the country at the end of the seventeenth century, the structures no longer had any purpose. They could conceivably have been turned into estates since each of these fortified castles had a so-called “residence tower” (lakótorony), which at one point was occupied by the lord of the castle himself. But these uncomfortable old buildings were eventually abandoned in favor of mansions in the countryside or residences in the capital. And after the soldiers left, the locals pilfered the stones and bricks of the castle to build houses nearby. (This is how most city walls have disappeared over the centuries.)

To what extent should these structures be reconstructed? This question has been the subject of furious debate for a long time between those who consider extensive reconstruction a falsification of history and those who argue for complete reconstruction. The government’s emphasis is on tourism, not the sanctity of architectural history. And visitors are not going to flock to see piles of stones. Therefore, most of these fortresses will be more or less rebuilt. This is certainly true of the fortified castle of Diósgyőr.

Readers who want more information about this government initiative should take a look at an article titled “National Castle Program: Removal of ruins or falsification of history.” Here we learn that at least two of these fortresses will be completely reconstructed and that six will be partially reconstructed. In 17 cases only a section of the former structure will be reconstructed. Nine, most likely buildings too far gone, will receive some treatment to stop further deterioration.

And before

The Diósgyőr Castle after the rebuilding and before Diósgyőr Castle before and after

The reconstruction of the fortified castles may make some sense commercially, but the renovation of the mansions is questionable for several reasons. At the moment these fairly decrepit structures, most of them built in the nineteenth century, are not architectural masterpieces. Most eventually were used as schools or were even cut up into apartments or offices. Something ought to be done with them, but should they be completely renovated on mostly EU money? What does the state intend to do with 34 mansions? I fear that the plan is to sell them at a favorable price to domestic and foreign friends of the Orbán government. We mustn’t forget that István Tiborcz, Orbán’s son-in-law, is now in the real estate business and is involved in the sale of the Schossberger Mansion to a billionaire Turkish businessman.

There is another suspicious aspect of the National Mansion Project. In the last few months the number of officially recognized historic buildings has ballooned. The reason for adding more mansions to the list is simple. A construction company who wins a bid to renovate a historic building can charge up to 400,000 forints per m² both for alteration and construction, while for a non-historic building a company can charge only 320,000 for construction and 220,000 for alteration. In brief, more money can be squeezed out of Brussels if the mansion is of some historic significance or is deemed an architectural masterpiece.

The latest outrage is the government’s change in the payment schedule for construction work on these projects. The original understanding was that for projects designed to stimulate the tourist industry 30% of the amount bid could be received in advance. In April the government changed the regulation. Companies involved in these projects could get 50% of their money up front. On Monday the government decided that, without replacing a single brick, the construction companies could be paid in full. As far as Magyar Nemzet knows, “the European Commission is taking a dim view of this practice,” although at the moment the cost is being borne by the Hungarian taxpayers since Brussels will pay only when all work is finished, which in some cases may be only in 2022.

The Nádasdy Mansion is also the part of the program

The Nádasdy Mansion is also the part of the program

The mansion project may seem lavish, but in fact it is seriously underfunded. It costs an average of 400,000 forints per m² to build an ordinary house in a fashionable section of Budapest. To renovate these residences is extraordinarily expensive. According to the former chief of the office that used to handle issues connected with the country’s cultural heritage, the only sensible move would be to sell these state-owned mansions, as is, to domestic and foreign buyers who would undertake their renovation under strict guidelines. The money allocated for these houses, 1.5 billion per structure, might be enough to guarantee that the roofs don’t leak or perhaps it will cover the cost of an assessment of the physical state of the structures. But if that is the case, what will happen to the money the Hungarian government is giving from its own resources to the construction companies for the renovation of these buildings? A good question.

July 20, 2016

Furious denial of any wrongdoing and rejection of a European solution to the refugee crisis

I would like to continue with yesterday’s theme for at least two reasons. One is that the report of Human Rights Watch on the brutal treatment of refugees along the Serb-Hungarian border has been confirmed by Nick Thorpe, Budapest correspondent of BBC, who paid a visit to two camps at Horgos and Kelebia where the conditions are, he said, appalling. Apparently, the Hungarian authorities could easily handle the registration of 100 people a day instead of the 15 they do now, so it is obvious that the aim is to slow the process to discourage people from crossing into the European Union through Hungary. A physician from Doctors Without Borders also confirmed “cases of intentional trauma that can be related to excessive use of force.” And Thorpe reported cases where refugees were already as far as 25 km from Budapest and yet were forcibly moved back to beyond the fence hundreds of kilometers away.

As for some of the most brutal acts of violence, they may have been committed by far-right members of paramilitary organizations patrolling the border on their own. This is speculation because the activity of such groups along the border is not officially acknowledged. And yet, although the Serb-Hungarian border is 175 km long, it is hard to believe that if such groups do indeed patrol the border and beat up refugees who cross illegally, officials are unaware of this fact.

The second reason for continuing this theme is that today the parliamentary undersecretary of the Ministry of Interior, Károly Konrát, denied any and all wrongdoing. Human Rights Watch’s accusations are baseless. In fact, Hungary should be praised for its vigorous defense of the borders of the European Union. As for the humane treatment of migrants, again Hungary can only be praised. The government spends 140,000 forints a month on each refugee, more than the average Hungarian worker makes. Refugees receive three meals a day, a hygienic package, and medical treatment and medicine if needed. Of more than 17,000 illegal migrants, only eight filed complaints, and all eight cases turned out to be bogus.

As for the refugees whom Hungary doesn’t want, according to Nick Thorpe “the unofficial leader of the camp” at the border is a 25-year-old Afghan doctor who negotiates with the Hungarian Office of Immigration and Nationality. Then there is the 23-year-old Syrian refugee who, after spending five days in a Hungarian jail, is now studying computer programming in Berlin in a program called ReDi. But it seems that the Hungarian government finds the idea of admitting desirable immigrants “inhumane and contrary to the European ideal.” János Lázár, for example, described such a practice as a “market place for human beings” where each country picks the “desirable” ones. He fears that Germany and other western countries will pick the best, leaving “the rejects” for the East Europeans.

As expected, the Hungarian government is both denouncing and falsifying the European Commission’s proposed reform of the asylum system, released yesterday. In the interest of truth, I think I should summarize its main points.

The overall procedure will be shortened and streamlined, and decisions will be made in a maximum of six months. Asylum seekers will be guaranteed the right to a personal interview as well as free legal assistance and representation during the administrative procedure. A guardian will be assigned to unaccompanied minors. New obligations to cooperate with the authorities will be introduced. All asylum seekers must have the same protection regardless of the member state in which they make their applications. In order to achieve this harmonization, the member states will be obliged to take into account guidance coming from the European Agency for Asylum. As bruxinfo.hu, a Hungarian internet site reporting on the affairs of the EU, pointed out, there is no talk here of compulsory quotas or punishment for non-compliance. Each year member states would announce the number of refugees they could accommodate. They would receive 10,000 euros for each refugee accepted.

rejection

So, let’s see how this was translated into Orbanite Hungarian by János Lázár this afternoon at his regular Government Info. In his reading, according to Dimitris Avramopoulos’s suggestion “Hungary would have to undertake the complete integration of immigrants forcibly brought into the country.” This is a preposterous idea, which “goes beyond the notion of compulsory settlement quotas.” While he was at it, he reminded his audience that the European Parliament accepted a proposal that would include heavy financial penalties if refugees were not accepted. Moreover, George Soros’s scheme of imposing extra taxes and/or other financial punishment on countries that refuse to participate in the program is “still on the table of the European Commission.” Lázár is referring to Soros’s speech, discussed here earlier.

Lázár is convinced that the “leftist delegations” of the European Parliament, together with the European Commission, work daily on their settlement schemes and keep coming up with new suggestions. That is why there is a need for the quota referendum, to be held on October 2. Lázár finds it impossible to believe that the European Commission will simply ignore the results of “direct democracy.” The referendum, instead of decreasing European integration, will actually strengthen it. It will be “a stabilizing factor.” Unfortunately, he didn’t elaborate on this claim. I would have been curious to see how our maverick Fidesz double-talker could possibly make his case.

Lázár, in talking about fines, repeated a piece of disinformation that the Hungarian government has spread far and wide in the last few days. Fidesz accused MSZP, DK, and LMP members of the European Parliament of voting in favor of a motion to fine states that refuse to participate in the migrant quota scheme. In fact, the report the European Parliament adopted says only that “a European approach is needed based on solidarity and a just distribution of the burden to resolve the migration and refugee crisis.” And, as it turned out, not only “leftist” members but also the vast majority of the European People’s Party, to which Fidesz belongs, voted for it.

You may recall János Lázár’s statement last week that he wouldn’t vote for Hungarian membership in the European Union today because of its migration policies. Of course, he said, this is his “personal opinion,” but a high government official, especially the man who is in charge of the disbursement of billions of euros received from the European Union, should not publicly share a “personal opinion.” Today he followed up, saying that “we didn’t secede from the Soviet Union in order to become a member of another union, but we left the Soviet Union so at least we can be independent and sovereign.”

Well, I don’t want to sound like a schoolmarm, but Hungary was never part of the Soviet Union. That, of course, is the least of the difficulties here. Hungarians desperately wanted to belong to the European Union, and at a referendum well over 80% of them voted for membership. Today, 75% still want to remain in the Union. With their vote at that referendum the Hungarian people authorized their government to give up some of the country’s independence and sovereignty. If Lázár, the second most important man in the Orbán government, insists on full independence and sovereignty, he should discuss it with his boss, and they should start making preparations for a Hungxit. And, while they’re at it, for their retirement from politics.

July 14, 2016